SK On to build nickel production facility in Indonesia with EcoPro, China’s GEM

SK On Co. will build a facility in Indonesia to produce mixed hydroxide precipitate (MHP) and secure a stable supply of the key material.

For this purpose, the South Korean battery maker has signed a memorandum of understanding with EcoPro Co., a South Korean cathode producer, and Green Eco-Manufacture (GEM), a Chinese battery component maker.

The factory will be built factory in the Morowali industrial complex in Central Sulawesi.

MHP is an intermediate nickel product for electric vehicle batteries and feedstock for nickel sulfate used to make battery-grade precursors.

A precursor refers to a specific chemical form containing nickel, cobalt, manganese, and aluminum before turning into cathodes, one of the key materials in lithium-ion batteries.

Starting in the third quarter of 2024, the three businesses plans to start producing MHP with 30,000 tons of high-purity nickel in the new facroty. This is enough to create EV batteries with a 43 gigawatt-hour capacity, which can run around 600,000 EVs.

Additionally, the three businesses will cooperate to secure oxidized nickel ore, a crucial supply of MHP, at the Hengjaya mine in the same Indonesian province. As a byproduct, cobalt can be extracted by miners from oxidized nickel ore.

The three are also thinking of producing nickel sulfate and precursors in South Korea with the MHP facility, a move that will assist SK On in continuing its activities in the United States when a new U.S. law on EV tax credits is passed.